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Crane Industries had sales in 2024 of $7,752,000 and gross profit of $1,254,000. Management is...

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Accounting

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Crane Industries had sales in 2024 of $7,752,000 and gross profit of $1,254,000. Management is considering two alternative budget plans to increase its gross profit in 2025. Plan A would increase the unit selling price from $8.00 to $8.40. Sales volume would decrease by 142,500 units from its 2024 level. Plan B would decrease the unit selling price by $0.50. The marketing department expects that the sales volume would increase by 148,200 units. At the end of 2024. Crane has 45,600 units of inventory on hand. If Plan A is accepted, the 2025 ending inventory should be 39,900 units. If Plan B is accepted, the ending inventory should be equal to 68,400 units. Each unit produced will cost $1.50 in direct labor. $1.30 in direct materials, and $1.20 in variable overhead. The fixed overhead for 2025 should be $2,134,080. Prepare a sales budget for 2025 under each plan. (Round Unit selling price answers to 2 decimal places, e.8. 52.70.) Prenare a nendurtion hudnot fore ono Compute the production cost per unit under each plan. (Round answers to 3 decimal places, e.g. 1.254.) Compute the gross profit under each plan. (Round answers to 0 decimal places, eg. 125.) Which plan should be accepted? should be accepted

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